Sean Chu, Patrick Bajari, Minjung Park, 02 February 2009

This column presents empirical evidence identifying the factors triggering mortgage defaults in the US. Both deterioration of borrowers’ net equity and liquidity constraints have been important. Policy remedies will have to address both concerns – the authors recommend write-downs on loan principal amounts as one such measure.

Carmen Reinhart, 22 May 2008

Emerging economies are increasingly moving from external to domestic debt. Conventional wisdom says that this is an improvement that signals a lower risk of sovereign default. But this column presents evidence that history disagrees and argues that defaults are likely to persist.

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CEPR Policy Research